Policy issue:
Is energy use decreasing?

Figures

Fancybox relations

Key assessment

The trend in final energy consumption by sector provides a broad indication of progress made in reducing energy consumption and associated environmental impacts by the different end-use sectors. It can be used to help monitor the success of key policies that attempt to influence energy consumption and energy efficiency.

Final energy consumption in the EU-25 increased by 12.6 % between 1990 and 2004, thus to an extent counteracting reductions in the environmental impact of energy production, which were achieved as a result of fuel mix changes and technological improvements. Between 2003 and 2004, final energy consumption grew by 1.1 %. The fastest growing sector was transport, followed by households and services. Final energy consumption in industry fell during the period but picked up in 2004. The structure of final energy consumption has also undergone significant changes in recent years.

Transport was the fastest-growing sector in the EU-25 between 1990 and 2004, with final energy consumption increasing by 28.6 %. Improvements in fuel efficiency were offset by increases in passenger and freight transport demand. Higher transport demand has resulted from increased ownership of private cars, particularly in the new EU Member States, growing settlement and urban sprawl with longer distances and changes in lifestyle. The development of the internal market resulted in increased freight transport as companies exploit the competitive advantages of different regions. Furthermore, improvements in transport infrastructure may also have contributed to transport growth by reducing the travel times and sometimes costs. Rapid increases in passenger aviation have been apparent, in part due to the growth of low- cost airlines, which have made this mode of transport more accessible to a larger section of the population.

Household final energy consumption increased by 17.5 % as rising personal incomes have permitted higher standards of living, with increases in comfort levels and the ownership of domestic appliances. Space heating and cooling is the most significant component of household energy demand1, and can vary substantially from year to year depending on climatic variations. Cold winters have influenced the increase in final energy consumption in particular between 1990-91, 1995-96, 2000-2001 and 2002-2003 (ADEME, 2005). However, it is the demand for electricity from appliances that has increased most rapidly in percentage terms in recent years (see EN18-EU-25).

Services (including agriculture and other sectors) final energy consumption grew by 11.9 % due to rapid growth of a wide range of service sectors. This had led to a continued increase in the demand for electrical appliances, in particular information and communication technology (such as computers and photocopiers), but also for other energy-intensive technologies such as air-conditioning.

The industry sector showed a decrease in final energy consumption between 1990 and 2004 (-4.1 %). This was largely the result of a shift towards less energy-intensive manufacturing industries, as well as the continuing transition to a more service-oriented economy. It was stimulated by structural changes in many countries (including post re-unification effects in Germany) and the rapid transition to market-based economies in the new Member States.

These developments meant that by 2004, transport was the largest consumer of final energy, followed by industry, households and services. There are significant differences in the pattern of final energy consumption between the pre-2004 EU-15 Member States and the new EU-10 Member States. The new Member States have seen falling final energy consumption mainly as a result of economic restructuring following the political changes of the early 1990s, which led principally to a decline in heavy industry. However, with the recovery in these countries' economies, final energy consumption has grown slightly since 2000. These structural changes and improvements in energy efficiency meant that between 1990 and 2004 the average annual EU25 growth rate of final energy consumption (0.8 %) was well below that of the gross domestic product growth of the EU-25 (2.1 %). This led to a decrease in final energy consumption intensity at an average annual rate of -1.2 %, but this trend has slowed down in recent years (see EN-21 on final energy intensity).

Baseline projections of the development of the EU-25 energy system indicate a continuous overall increase in final energy consumption in all sectors to 2030, although the rate of increase is projected to slow after 2010. A further decoupling from GDP growth is expected (see EN17-EU-25 and EN21-EU-25). This is in large part due to technological progress in transport efficiency, improved insulation standards in homes and other buildings and further development of industrial energy efficiency (European Commission, 2004).

If dedicated energy efficiency policies and measures were implemented along the lines of the Action Plan on Energy Efficiency (COM(2000) 247 final), the EU-25 final energy consumption would increase by 23 % compared with the year 1990 instead of 38 % under a baseline scenario. Total energy-related CO2 emissions between 1990 and 2030 would decrease by 4.5 % instead of increasing by 14 % as in the baseline, underlining the importance of energy efficiency improvements in reducing CO2 emissions (European Commission, 2004, 'Energy Efficiency Case'). Introducing a carbon-permit price in order to reduce CO2 emissions as assumed in the Low Carbon Energy Pathway scenario (EEA, 2005) will also result in a lower rate of growth in final energy consumption than the baseline scenario. Nevertheless, energy consumption would continue to increase in all sectors except for the household sector from 2020-2030, which shows a decrease in final energy consumption over this 10 year period.

These scenario results suggest that there are significant opportunities to reduce final energy consumption in all sectors beyond a baseline development, but particularly in the household and service sectors via a reduction in energy consumption for heating, electrical appliances and lighting. In these sectors, the use of minimum standards for new buildings and appliances, more wide-spread uptake of existing cost-effective measures (such as insulation and combined heat and power) and the provision of energy services and demand side management may be important to ensure that this potential reduction is realised.

The continued potential for saving energy in all sectors is widely recognised. The Directive on end-use efficiency and energy services (2006/32/EC) as well as the Green Paper (COM(2005) 265 final) on energy efficiency note that in the EU-15 energy consumption is approximately 20 % higher than can be justified on economic grounds, with an even higher potential in the new EU Member States. Additional policy measures in all sectors are necessary to overcome barriers to the uptake of more energy efficient technologies and cost-effective energy efficiency investments, in order to speed up the decrease in total energy consumption intensity. Well-known barriers include inefficient for example energy pricing, and lack of information and financing mechanisms.